Question

The incomes in a certain large population of college teachers have a normal distribution with mean $75,000 and standard deviation $8,000. Sixteen teachers are selected at random from this population to serve on a committee. What is the probability that their average salary is more than $77,500?

Answer 1

Answer:

0.1056 = 10.56% probability that their average salary is more than $77,500.

Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal Probability Distribution:

Problems of normal distributions can be solved using the z-score formula.

In a set with mean $\mu$ and standard deviation $\sigma$, the z-score of a measure X is given by:

$Z = \frac{X - \mu}{\sigma}$

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem estabilishes that, for a normally distributed random variable X, with mean $\mu$ and standard deviation $\sigma$, the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean $\mu$ and standard deviation $s = \frac{\sigma}{\sqrt{n}}$.

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

Mean $75,000 and standard deviation $8,000.

This means that $\mu = 75000, \sigma = 8000$

Sample of 16

This means that $n = 16, s = \frac{8000}{\sqrt{16}} = 2000$

What is the probability that their average salary is more than $77,500?

This is 1 subtracted by the pvalue of Z when X = 77500. So

$Z = \frac{X - \mu}{\sigma}$

By the Central Limit Theorem

$Z = \frac{X - \mu}{s}$

$Z = \frac{77500 - 75000}{2000}$

$Z = 1.25$

$Z = 1.25$ has a pvalue of 0.8944

1 - 0.8944 = 0.1056

0.1056 = 10.56% probability that their average salary is more than $77,500.